Taipei, Aug 29:
Amid global trade uncertainties and a shifting geopolitical landscape, Taiwan has expressed a strong desire to sign a Free Trade Agreement (FTA) with India. The proposed pact is seen as a crucial step to deepen economic cooperation, boost bilateral trade, and create a powerful technology partnership, particularly in the high-value semiconductor sector.
India, a Key Partner in Taiwan’s Strategic Pivot
Taiwan’s Deputy Trade Representative Yen Huai-shing highlighted India’s central role in the island nation’s New Southbound Policy (NSP), a strategy introduced to reduce economic overdependence on China by strengthening ties with South Asia, Southeast Asia, Australia, and New Zealand.
“India is one of our most important partners under the NSP,” Yen said. “We recognise India’s growing need to reduce reliance on Chinese electronics and are ready to support this shift. However, New Delhi must create a more attractive investment environment to draw Taiwanese businesses.”
Taiwan sees an FTA as a stepping stone to unlock trade opportunities, facilitate easier investments, and strengthen supply chain resilience. According to Yen, Taiwan’s world-class expertise in chipmaking and India’s vast talent pool in software and IT services make the countries natural partners in the global tech ecosystem.
Complementary Strengths in Technology and Trade
Prof. Liu Da-Nien, Director of the Chung-Hua Institute for Economic Research, stressed that the two economies could complement each other perfectly. “India is becoming a powerhouse in software and digital services, while Taiwan dominates global semiconductor manufacturing. Together, they can form a competitive alternative supply chain to challenge existing global dependencies,” Liu said.
Taiwan’s semiconductor sector, led by giants like TSMC, produces over 60% of the world’s chips, making its collaboration vital to India’s ambition of becoming a major electronics hub. An FTA would help create a seamless trade and investment environment for this strategic cooperation to flourish.
Navigating Geopolitical Tensions
The talks about closer trade ties come as protectionist trends are rising globally, with the United States recently announcing tariff hikes that have disrupted several supply chains. Taiwan’s Foreign Minister Lin Chia-lung believes an FTA with India would create a solid framework for both nations to withstand global trade disruptions.
However, Prof. Liu cautioned that India will have to carefully manage geopolitical pressure from China, which has consistently opposed Taiwan’s formal diplomatic engagement with other countries. “India’s willingness to withstand Chinese pressure will be key to the success of any bilateral negotiations,” Liu said.
Expanding Labour Cooperation
Beyond trade and technology, Taiwan is also looking to India to help address its labour shortages. The island faces a demographic crisis, with an ageing population and declining birth rates straining its workforce.
Taiwan’s Labour Minister Hung Sun-han announced that the country will employ more Indian workers, particularly in industries and research. Currently, about 3,200 Indian professionals work in Taiwan, mostly in IT and research roles.
“Taiwan is expanding its recruitment of foreign workers and introducing stronger protections to ensure fair treatment,” Hung said. “This is not only about filling jobs but also about integrating global talent to sustain economic growth.”
A Potentially Game-Changing Partnership
Industry experts say an India-Taiwan FTA would mark a major shift in Asia’s economic map. It would strengthen supply chain resilience, help India reduce reliance on China, and give Taiwan a foothold in one of the world’s fastest-growing markets.
If realised, the partnership could also accelerate India’s semiconductor ambitions. The Indian government has already announced a $10 billion incentive plan for chipmaking and has been actively inviting Taiwanese firms to invest in manufacturing plants and research centres.
With geopolitical tensions rising and global economies looking to diversify supply chains, the India-Taiwan partnership could emerge as a critical alliance shaping Asia’s economic future.
